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     126  0 Kommentare Exchange Bank Announces Third Quarter Earnings of $7.98 Million, a 1.66% Increase Over the Prior Quarter

    Exchange Bank (OTC: EXSR) today announced results for the third quarter of 2020 with a profit after tax of $7.98 million, compared to $7.85 million in the previous quarter ending June 30, 2020. The operating results of the Bank before provision for loan loss and taxes, increased from $10.81 million during the quarter ending June 30, 2020 to $11.90 million during the quarter ending September 30, 2020, an increase of 10%.

    This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20201030005146/en/

    Exchange Bank headquarters in downtown Santa Rosa (545 Fourth Street) (Photo: Business Wire)

    Exchange Bank headquarters in downtown Santa Rosa (545 Fourth Street) (Photo: Business Wire)

    “During this challenging period in which all of our lives have been disrupted by the COVID-19 virus, and more recently the devastating massive wildfires impacting our communities, we continue to support and provide much needed assistance to our customers. In a historically low interest rate environment, we have produced good operating results and our credit quality remains strong. I am extremely proud of the extraordinary efforts of our employees to meet the needs of our customers and support the preservation of jobs in our community,” said Gary Hartwick, president and CEO.

    The Bank continues to support its customers, providing payment deferrals to borrowers who have been negatively impacted by the COVID-19 virus. The Bank has also waived ATM and overdraft fees for its consumer and business customers. The Bank expended tremendous resources participating in the SBA Paycheck Protection Program (PPP) under the CARES Act. As a result of this effort, Exchange Bank provided loans to 1,780 small businesses with loan balances totaling approximately $260 million.

    The Bank’s net income was $7.98 million, compared to $9.35 million in the third quarter of 2019. The decrease in earnings can be directly attributed to declines in net interest income, non-interest income and provision for loan loss. The Bank’s third quarter 2020 results were heavily influenced by the changing patterns of behavior by both business and consumer clients as well as the fiscal and monetary response of the U.S. Government to the coronavirus pandemic. The Bank’s net interest income declined from $24.92 million during the third quarter of 2019 to $24.08 million during the third quarter of 2020. During a period of time when treasury yields remained anchored near historic lows, the Bank’s margin was negatively impacted by declines in yields on loans and investments that surpassed the Bank’s ability to affect a similar decline in interest expense through a lower cost of funds. The loss of interest income due to lower yields on loans and investments was somewhat offset by the increase in interest income as a result of the growth of $260 million in PPP loans and other liquid investments totaling approximately $180 million.

    Non-interest income declined from the $6.20 million in the third quarter of 2019 to $5.22 million during the third quarter of 2020. During the third quarter of 2020, the Bank witnessed significant declines in various elements of deposit service fee income that are directly associated with a weaker level of personal consumption and low interest rates, as well as a reduction in SBA revenue due to the lack of new business formation in the midst of this crisis.

    The Bank experienced a dramatic increase in deposit balances which were up year-over-year by approximately $379 million or 16.5%. Much of this increase in deposits occurred during the second quarter of 2020 resulting from business deposits totaling approximately $260 million relating to the deposit of PPP loan funds received by Bank clients. An additional source of deposits totaling $119 million came from both business and consumer clients who chose to hold more liquid assets during this period of great uncertainty. The increase in deposits led to a material decline in deposit service fee income as a result of the waiver of fees associated with higher customer compensating balances. While the deposit balances have remained fairly constant through the third quarter, the Bank expects to witness a significant runoff of the excess deposits due to the unusual and short-term nature as they are used to support small business and consumer related expenses over the next year.

    During the nine months ending September 30, 2020, the Bank achieved net earnings of $24.46 million, compared to $27.43 million during the similar nine-month period in 2019, a decrease of $2.97 million or 10.8%. As previously discussed, the low interest rate environment as well as changes in consumption patterns as a result of the pandemic related events combined to have a negative impact on net interest income and deposit-related fee income. During the nine months ending September 30, 2020, a decline in non-interest income totaling $2.26 million, was concentrated in the areas of deposit fee income and SBA income. As a result of declining yields on loans and investments, the Bank experienced a decline of $1.86 million in net interest income for the nine months ended September 30, 2020 compared to the similar period in 2019. These declines in revenue were somewhat offset by the Bank’s focus on controlling operating expenses. Adjusting to an environment of generally slower business activity, the Bank was successful in reducing operating expenses during the nine months ending September 30, 2020 by approximately $600 thousand or 1.2%. The quality of the Bank’s loan portfolio remains strong, however, due to the economic uncertainty that exists today, the Bank elected to strengthen its reserve for potential future losses with a provision for loan loss totaling $900 thousand during the third quarter of 2020. The Bank did not take such a provision for loan loss during the similar quarter in 2019.

    “As an organization, we are grateful to be in a position of strength in terms of capital and liquidity that will allow us to continue to meet the needs of our clients and community as we work through this turbulent period together,” said Hartwick.

    Exchange Bank paid a quarterly cash dividend of $1.20 per share on common stock outstanding to shareholders on September 18, 2020. 50.44% of the cash dividend goes to the Doyle Trust which funds the Doyle Scholarships at the Santa Rosa Junior College.

    About Exchange Bank

    Headquartered in Sonoma County and founded in 1890, Exchange Bank is a premier community bank with assets of $3 billion. Exchange Bank provides a wide range of personal, commercial and trust and investment services with 18 branches in Sonoma County and a commercial branch in Roseville, California. The Bank’s legacy of financial leadership and community support is grounded in its core values of Commitment, Respect, Integrity and Teamwork.

    Exchange Bank is a 15-time winner of the North Bay Business Journal’s (NBBJ) Best Places to Work survey, a recipient of the 2020 North Bay Community Philanthropy Award and the 2019 Healthiest Companies in the North Bay Award. NorthBay biz magazine named Exchange Bank the 2020 Best Consumer Bank and Best Business Bank. The Petaluma People’s Choice Awards named Exchange Bank the Best Local bank and the North Bay Bohemian’s Best of 2019 Readers Poll named Exchange Bank the Best Business Bank and Best Consumer Bank. Exchange Bank can also be found in the NBBJ’s Book of Lists as a leading lender and wealth management advisor—claiming the #1 position in SBA 7(a) lending in Sonoma County for 2019. www.exchangebank.com

    Member FDIC — Equal Housing Lender — Equal Opportunity Employer

    EXCHANGE BANK
    and Subsidiaries
     
    Consolidated Balance Sheets
    (Unaudited)
     
    September 30, 2020 and 2019
    (In Thousands)
    Change % Change
    ASSETS

    2020

     

    2019

     

    20/19

     

    20/19

     
    Cash and due from banks

    $

    47,398

     

    $

    45,973

     

    $

    1,425

     

    3.10

    %

    Federal Reserve Bank

     

    208,182

     

     

    100,158

     

     

    108,024

     

    107.85

    %

    Total Cash and cash equivalents

     

    255,580

     

     

    146,131

     

     

    109,449

     

    74.90

    %

     
    Investments
    Interest-earning deposits in other financial institutions

     

    41,000

     

     

    59,000

     

     

    (18,000

    )

    -30.51

    %

    Securities available for sale

     

    809,046

     

     

    719,069

     

     

    89,977

     

    12.51

    %

    FHLB Stock

     

    13,483

     

     

    13,483

     

     

    -

     

    0.00

    %

     
    Loans and leases
    Real estate

     

    1,159,649

     

     

    1,095,141

     

     

    64,508

     

    5.89

    %

    Consumer

     

    134,910

     

     

    127,676

     

     

    7,234

     

    5.67

    %

    Commercial

     

    528,474

     

     

    356,186

     

     

    172,288

     

    48.37

    %

     

     

    1,823,033

     

     

    1,579,003

     

     

    244,030

     

    15.45

    %

    Less allowance for loan and lease losses

     

    (40,443

    )

     

    (39,573

    )

     

    (870

    )

    2.20

    %

     
    Net loans and leases

     

    1,782,590

     

     

    1,539,430

     

     

    243,160

     

    15.80

    %

     
    Bank premises and equipment

     

    20,265

     

     

    17,971

     

     

    2,294

     

    12.77

    %

    Other assets

     

    115,240

     

     

    108,452

     

     

    6,788

     

    6.26

    %

     
    Total Assets

    $

    3,037,204

     

    $

    2,603,536

     

    $

    433,668

     

    16.66

    %

     
     
    LIABILITIES AND STOCKHOLDERS' EQUITY
     
    Deposits
    Non-Interest Bearing Demand

    $

    1,076,938

     

    $

    829,410

     

    $

    247,528

     

    29.84

    %

    Interest Bearing
    Transaction

     

    501,106

     

     

    481,744

     

     

    19,362

     

    4.02

    %

    Money market

     

    322,945

     

     

    293,537

     

     

    29,408

     

    10.02

    %

    Savings

     

    582,954

     

     

    511,009

     

     

    71,945

     

    14.08

    %

    Time

     

    190,683

     

     

    179,621

     

     

    11,062

     

    6.16

    %

     
    Total Deposits

     

    2,674,626

     

     

    2,295,321

     

     

    379,305

     

    16.53

    %

     
    Other liabilities

     

    64,501

     

     

    46,155

     

     

    18,346

     

    39.75

    %

     
    Total liabilities

     

    2,739,127

     

     

    2,341,476

     

     

    397,651

     

    16.98

    %

     
    Stockholders' equity

     

    298,077

     

     

    262,060

     

     

    36,017

     

    13.74

    %

     
    Total Liabilities and Stockholder's Equity

    $

    3,037,204

     

    $

    2,603,536

     

    $

    433,668

     

    16.66

    %

    EXCHANGE BANK
    and Subsidiaries
     
    Consolidated Statements of Operations
    (Unaudited)
     
    For the Period Ended September 30, 2020 and 2019
    (In Thousands, except per share amounts) Nine Months Ended

    Quarter Ended

     

    Nine Months Ended

     

    Change

     

    % Change

    2020

     

    2019

     

    2020

     

    2019

     

    20/19

     

     

    20/19

     
    Interest Income
    Interest and fees on loans

    $

    20,821

    $

    20,324

    $

    60,386

    $

    59,056

    $

    1,330

     

    2.25

    %

    Interest on investments securities

     

    3,980

     

    5,831

     

    13,470

     

    17,470

     

    (4,000

    )

    -22.90

    %

     
    Total interest income

     

    24,801

     

    26,155

     

    73,856

     

    76,526

     

    (2,670

    )

    -3.49

    %

     
    Interest expense
    Interest on deposits

     

    717

     

    1,231

     

    2,684

     

    3,498

     

    (814

    )

    -23.27

    %

    Total interest expense

     

    717

     

    1,231

     

    2,684

     

    3,498

     

    (814

    )

    -23.27

    %

     
    Net interest income

     

    24,084

     

    24,924

     

    71,172

     

    73,028

     

    (1,856

    )

    -2.54

    %

     
    Provision (reversal of) for losses on loans

     

    900

     

    -

     

    900

     

    -

     

    900

     

    0.00

    %

     
    Net interest income after provision for loan and leases

     

    23,184

     

    24,924

     

    70,272

     

    73,028

     

    (2,756

    )

    -3.77

    %

     
    Non-interest income

     

    5,218

     

    6,197

     

    15,831

     

    18,094

     

    (2,263

    )

    -12.51

    %

     
    Non interest expense
    Salary and benefit costs

     

    9,786

     

    9,966

     

    29,221

     

    29,180

     

    41

     

    0.14

    %

    Other expenses

     

    7,615

     

    8,078

     

    23,088

     

    23,762

     

    (674

    )

    -2.84

    %

    Total non-interest expense

     

    17,401

     

    18,044

     

    52,309

     

    52,942

     

    (633

    )

    -1.20

    %

     
    Income before income taxes

     

    11,001

     

    13,077

     

    33,794

     

    38,180

     

    (4,386

    )

    -11.49

    %

     
    Provision for income taxes

     

    3,023

     

    3,724

     

    9,331

     

    10,750

     

    (1,419

    )

    -13.20

    %

     
    Net income

    $

    7,978

    $

    9,353

    $

    24,463

    $

    27,430

    $

    (2,967

    )

    -10.82

    %

     
     
    Basic earnings per common share

    $

    4.54

    $

    5.46

    $

    14.27

    $

    16.00

    $

    (1.73

    )

    -10.82

    %

    Dividends per share

    $

    1.20

    $

    1.10

    $

    3.60

    $

    3.25

    $

    0.35

     

    10.77

    %

    Earnings per share is computed by dividing net income, by the weighted averaged number of shares outstanding during the year.

     

    Total average shares outstanding for both 2020 and 2019 was 1,714,344

     



    Business Wire (engl.)
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    Exchange Bank Announces Third Quarter Earnings of $7.98 Million, a 1.66% Increase Over the Prior Quarter Exchange Bank (OTC: EXSR) today announced results for the third quarter of 2020 with a profit after tax of $7.98 million, compared to $7.85 million in the previous quarter ending June 30, 2020. The operating results of the Bank before provision for …